Inter-corporate debt: PSO’s receivables swell to Rs251.7 billion

ISLAMABAD: Though the government claims to have restricted inter-corporate debt, it is still haunting state-run oil marketing company Pakistan State Oil (PSO) as its receivables from different clients, particularly power producers, have piled up to Rs251.7 billion.

PSO is a major supplier of fuel to the power companies, which have to pay around Rs220 billion. This includes Rs149 billion in outstanding bills and Rs75 billion in late payment surcharge.

With its miseries growing due to delay in client payments, PSO has approached the Ministry of Water and Power, asking it to honour the commitment to clear the bills.

In a letter written to Water and Power Secretary Younus Dagha on November 1, 2016, PSO authorities recalled that in a meeting on September 20, the company’s receivables against supplies made to power companies under seven-day credit arrangement were discussed.

They said an understanding was reached that the outstanding balance under the credit arrangement, which stood at Rs5 billion in September 2016, would be cleared in the month. However, the amount instead of decreasing has gone up to Rs13 billion.

“Your personal intervention is requested to ensure the allocation of funds to PSO equivalent to the overdue receivables amounting to Rs13 billion,” PSO said in the letter.

The company also drew the attention of power secretary to no payments made against claims of late payment surcharge for the first four months (July-October) of the current fiscal year.

However, the company had been assured earlier that Rs3 billion would be released under that category in order to pay interest to banks.

In the power sector, the Water and Power Development Authority had to pay Rs131 billion to PSO, Hub Power Company Rs62.8 billion, Kot Addu Power Company Rs18.1 billion, Saba Power and Southern Electric Rs0.3 billion and K-Electric Rs1.4 billion.

Apart from power producers, PSO was to receive Rs15.3 billion from Pakistan International Airlines for fuel supplies. Sui Northern Gas Pipelines owed PSO Rs5.9 billion on account of liquefied natural gas (LNG) supplies since the oil marketing company entered the LNG market last year.

PSO has payables on its balance sheet as well. It owes Rs62.3 billion to fuel suppliers including Rs9.8 billion to domestic refineries and Rs52.6 billion to oil and LNG importers.